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COUNCIL OF

THE EUROPEAN UNION

Brussels, 23 May 2006

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ADD 1

ENV 304

AGRI 188

DEVGEN 148

PI 34

FORETS 15

ONU 69

ADDENDUM to COVER NOTE

from: Secretary-General of the European Commission,

signed by Mr Jordi AYET PUIGARNAU, Director

date of receipt: 23 May 2006

to: Mr Javier SOLANA, Secretary-General/High Representative

Subject: Halting the loss of biodiversity by 2010 — and beyond

Sustaining ecosystem services for human well–being

Impact Assessment

Delegations will find attached Commission document SEC(2006) 607.

________________________ Encl.: SEC(2006) 607

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COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 22.5.2006 SEC(2006) 607

COMMISSION STAFF WORKING DOCUMENT

Annex to the

COMMUNICATION FROM THE COMMISSION

HALTING THE LOSS OF BIODIVERSITY BY 2010 — AND BEYOND

Sustaining ecosystem services for human well–being

{COM(2006)216 final}

IMPACT ASSESSMENT

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TABLE OF CONTENTS

1. Procedural issues and consultation of interested parties .............................................. 7

1.1. Purpose of this Impact Assessment.............................................................................. 7

1.2. Policy context............................................................................................................... 7

1.3. Organisation and timing............................................................................................... 8

1.4. Consultation and expertise ........................................................................................... 8

1.4.1. Policy review 2003-2004 and Malahide Conference ................................................... 8

1.4.2. Council Conclusions and Commission follow-up........................................................ 9

1.4.3. Results of the web consultation.................................................................................. 10

2. Problem definition...................................................................................................... 11

2.1. What is biodiversity and what are ecosystem services, and how are they linked? .... 11

2.2. What is happening to biodiversity and ecosystem services? ..................................... 13

2.2.1. Loss, fragmentation and degradation of ecosystems.................................................. 13

2.2.2. Loss of species and reduction in species’ populations............................................... 17

2.2.3. Loss of genetic diversity ............................................................................................ 21

2.2.4. Decline in ecosystem services.................................................................................... 21

2.3. What is causing biodiversity loss and the degradation of ecosystem services?......... 24

2.3.1. Key pressures and drivers of loss............................................................................... 24

2.4. Why do the loss of biodiversity and degradation of ecosystem services matter?...... 27

2.4.1. The value of provisioning services ............................................................................ 27

2.4.2. The value of regulating services ................................................................................ 28

2.4.3. The value of supporting services................................................................................ 28

2.4.4. The value of cultural services .................................................................................... 28

2.4.5. The importance of ecosystem services in developing countries ................................ 28

2.4.6. Costs of non-action .................................................................................................... 29

2.5. Who is affected and to what extent? .......................................................................... 32

2.6. What have we done about it so far? ........................................................................... 32

2.6.1. Progress with implementation – EU internal dimension............................................ 32

2.6.2. Progress with implementation – EU external dimension........................................... 37

2.6.3. Progress with implementation – supporting measures............................................... 39

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2.7. How would the problem evolve, all things being equal? ........................................... 40

2.7.1. Changes in pressures and drivers ............................................................................... 40

2.7.2. Ecosystems and species.............................................................................................. 42

2.7.3. Ecosystem services..................................................................................................... 43

2.8. Does the EU have the right to act?............................................................................. 44

3. Objectives................................................................................................................... 45

3.1. What are the aims of the Communication? ................................................................ 45

3.2. Has account been taken of previously established objectives?.................................. 45

3.3. To what extent are the objectives consistent with other EU policies? ....................... 45

4. Policy options............................................................................................................. 46

4.1. What are the available policy approaches? ................................................................ 46

4.2. Elaboration of the preferred option ............................................................................ 47

4.2.1. A new approach to biodiversity policy ...................................................................... 47

4.2.2. Relationship of the Action Plan to the EC Biodiversity Strategy and Biodiversity Action Plans ............................................................................................................... 47

4.2.3. Identification of key policy areas, priority objectives and supporting measures ....... 48

4.2.4. Scope of Policy Area 1 - Biodiversity in the EU ....................................................... 48

4.2.5. Scope of Policy Area – The EU and global biodiversity ........................................... 50

4.2.6. Scope of Policy Area 3 – Biodiversity and climate change ....................................... 50

4.2.7. Scope of Policy Area 4 – The knowledge base.......................................................... 51

4.2.8. Scope of the four Supporting Measures ..................................................................... 51

4.3. What policy instruments and options are available?.................................................. 52

5. Analysis of impacts .................................................................................................... 52

5.1. Impacts of proposed actions to address priority objectives ....................................... 52

5.1.1. Objective 1: To safeguard the EU’s most important habitats and species ................. 52

5.1.2. Objective 2: To conserve and restore biodiversity in the wider EU countryside....... 54

5.1.3. Objective 3: To conserve and restore biodiversity in the wider EU marine environment................................................................................................................ 54

5.1.4. Objective 4: To reinforce compatibility of regional and territorial development with biodiversity in the EU ................................................................................................ 55

5.1.5. Objective 5: To substantially reduce the impact on EU biodiversity of invasive alien species and alien genotypes ....................................................................................... 56

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5.1.6. Objective 6: To substantially strengthen effectiveness of international governance for biodiversity................................................................................................................. 57

5.1.7. Objective 7: To substantially strengthen support for biodiversity in external assistance.................................................................................................................... 58

5.1.8. Objective 8: To substantially reduce the impact of international trade on EU and global biodiversity...................................................................................................... 59

5.1.9. Objective 9: To support biodiversity adaptation to climate change........................... 59

5.1.10. Objective 10: To substantially strengthen the knowledge base for conservation and sustainable use of biodiversity, in the EU and globally ............................................. 60

5.2. Impacts of proposed actions to address the ‘supporting measures’ ........................... 61

5.2.1. Supporting measure 1: Ensuring adequate financing................................................. 61

5.2.2. Supporting Measure 2: Strengthening EU decision-making for biodiversity............ 62

5.2.3. Supporting measure 3: Building partnerships ............................................................ 63

5.2.4. Supporting measure 4: Building public awareness and participation ........................ 64

6. Comparing the Options .............................................................................................. 65

7. Monitoring and evaluation ......................................................................................... 65

7.1. Core indicators of progress towards meeting the objectives...................................... 65

7.2. Broad outline for monitoring and evaluation arrangements ...................................... 65

IMPACT ASSESSMENT ANNEX 1

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Impact Assessment of the Communication on Halting the Loss of Biodiversity by 2010 –

and Beyond

EXECUTIVE SUMMARY

This Impact Assessment aims to analyse the impact of the Communication on Halting the Loss of Biodiversity by 2010 – and Beyond. It provides the European institutions and public with information on the impacts of biodiversity loss and of proposed measures to halt this loss and secure the longer-term recovery of biodiversity.

Section 1 provides a review of the use of consultation and expertise in the preparation of the Communication. This includes a year-long stakeholder review of progress in implementation, effectiveness and appropriateness of the European Community Biodiversity Strategy and Action Plans, culminating in the Stakeholder Conference on Biodiversity and the EU held under the auspices of the Irish Presidency in May 2004, and further consultation since then including a public web consultation.

Section 2 reviews the problem of biodiversity loss – at the levels of ecosystems, species and genes - and the closely related problem of decline in natural capital and ecosystem services, both within the EU and globally. It examines why this loss matters, in particular in terms of its impact on human wellbeing. It also reviews what we have done about it so far, both in terms of addressing biodiversity concerns in the policy framework, and in terms of implementation, and identified policy gaps and implementation shortfalls.

Section 3 presents the aims of the Communication and their consistency with other EU policies. It establishes the relevance of action to halt biodiversity loss, restore biodiversity and thereby reverse the decline in ecosystem services to sustainable development and the Lisbon agenda.

Section 4 presents three possible policy approaches:

(1) Business as usual – that is, ongoing implementation of existing instruments, with no attempt to prioritise action to meet the political commitments.

(2) EU Action Plan: development of a focused EU Action Plan to 2010 and Beyond, addressed to the Community and to Member States, created by deconstructing the 2010 commitments into a clear set of prioritised targets and actions, and apportioning responsibility for delivery between Commission, Member States and other stakeholders.

(3) EU Action Plan plus regulation: as for 2, but in addition the rapid introduction of new legislation.

The second of these approaches is defended as the preferred option, and is shown to be overwhelmingly supported by the results of expert and public consultation. The approach is elaborated through four key policy areas for action and ten related priority objectives, and four key supporting measures. Delivery of the objectives and supporting measures will require specific actions which are set out with targets and responsibilities in an ‘Action Plan to 2010 - and Beyond’ presented in Annex 1 of the Communication.

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Section 5 analyses the impacts of those few actions in the Action Plan which are new or accelerated beyond already agreed timetables. The impact assessment shows that a wide range of policy instruments already provide for these actions. Details of the specific provisions relating to each action are provided in Annex 1 of this impact assessment. For new and accelerated actions, the analysis suggests that the benefits – in terms of sustained ecosystem services - will significantly outweigh short-term costs. A small number of policy gaps are identified for further exploration and may be the subject of proposals and full impact assessment in due course.

Section 6 refers to the differentiation of Community and Member State responsibilities for each action, as presented in the Communication Annex 1. It indicates that the applicability and relative importance of each action will vary from Member State to Member State and that, in this sense, the Action Plan presents a menu of policy options for Member States.

Plans for monitoring and evaluation, including the establishment and implementation of a headline set of biodiversity indicators, are presented in section 7.

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1. PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES

1.1. Purpose of this Impact Assessment

This Impact Assessment aims to analyse the impact of the Communication on Halting the Loss of Biodiversity by 2010 – and Beyond. It provides the European institutions and public with information on the impacts of biodiversity loss and of proposed measures to halt this loss and secure the longer-term recovery of biodiversity.

1.2. Policy context

The legal basis for the conservation and sustainable use of biodiversity at the EU level is provided by the Treaty Article 174 which states that community policy on the environment shall contribute to ‘preserving, protecting and improving the quality of the environment’, based inter alia on the precautionary principle.

Early measures to safeguard species and habitats include the Birds Directive1 of 1979 and the Habitats Directive2 of 1992. The EU ratified the Convention on Biological Diversity (CBD) in 1993. Pursuant to the Convention, the Community adopted a Biodiversity Strategy in 19983 and four Biodiversity Action Plans4 in 2001. All EU Member States are parties to the CBD and have developed – or are developing – their own national strategies and action plans.

The EC Biodiversity Strategy aims at preventing and attacking the causes of reduction and loss of biological diversity and is built around four major themes: conservation and sustainable use of biodiversity; sharing of benefits arising out of the utilisation of genetic resources; research, identification, monitoring and exchange of information; and education, training and awareness. The Strategy defines the specific objectives to be attained in various fields of Community activity and proposes sectoral and cross-sectoral action plans to achieve these objectives and defining indicators and mechanisms to evaluate the progress made. The EC Biodiversity Action Plans define concrete actions and measures to meet the objectives defined in the Strategy, and specify measurable targets. The Action Plans relate to four sectors – the conservation of natural resources, agriculture, fisheries, and economic and development cooperation.

In 2001, EU Heads of State and government agreed to halt the decline of biodiversity [in the EU] by 20105. Beyond halting the loss of biodiversity, and in acknowledgment of the degraded state of biodiversity in the EU, they also set an objective to secure the recovery of habitats and natural systems6. In 2002, the CBD adopted its strategic plan which includes the overall target to significantly reduce the rate of biodiversity loss by 20107. This target was subsequently endorsed by some 130 world leaders (including EU heads of state and

1 Directive of 2 April 1979 on the conservation of wild birds (79/409/EC), OJ L 103, 25.4.1979, p.1. 2 Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats of wild fauna and flora, OJ

L 206, 22.7.1992, p.7. 3 COM(1998)42 final 4 COM(2001)142final. Vols I-V. 5 Presidency Conclusions, Göteborg Council, 15 and 16 June 2001. SN/200/1/01 REV1, page 8. See:

http://ue.eu.int/newsroom/newmain.asp?lang=1 6 This is a headline objective in the EU Sustainable Development Strategy, COM(2001)264 final, p12. 7 Convention on Biological Diversity Decision VI/26 Annex (Strategic Plan) paragraph 11, see:

http://www.biodiv.org/decisions/default.aspx?m=COP-06&id=7200&lg=0

http://ue.eu.int/newsroom/newmain.asp?lang=1http://www.biodiv.org/decisions/default.aspx?m=COP-06&id=7200&lg=0

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government) at the World Summit on Sustainable Development (2002). This Summit also recognised the CBD as the key international body to promote achievement of the 2010 target.8

1.3. Organisation and timing

The Communication and this Impact Assessment are based on a broad, deep and lengthy consultative process involving Commission services, Member States and civil society. This process engaged a wide range of experts as well as the wider public in accordance with the Commission’s minimum standards for consultation and use of experts. The general chronology of the Impact Assessment was as follows: expert consultation through Biodiversity Expert Group, May 2003 to February 2006 and through working groups established under the Biodiversity Expert Group from May 2003 to March 2004; Presidency stakeholder conference 25-27 May 2004; Environment Council discussion and conclusions, 28 June 2004; public internet consultation 12 December 2005 to 6 February 2006; Inter-Departmental Coordination Group (5 meetings March 2004 to February 2006 – participants included AGRI, AIDCO, COMP, DEV, EAC, ECFIN, ELARG, EMPL, ENTR, ESTAT, FISH, INFSO, JLS, JRC, MARKT, REGIO, RELEX, RTD, SANCO, SG, SJ, TAXUD, TREN).

1.4. Consultation and expertise

1.4.1. Policy review 2003-2004 and Malahide Conference

The Commission initiated in May 2003 a broad stakeholder process for assessment of the implementation, effectiveness and appropriateness of the EC Biodiversity Strategy and Biodiversity Action Plans. This process was agreed in consultation among Commission services most concerned (notably ENV, AGRI, FISH, DEV, RTD), Member States (EU-15), Acceding Countries (now EU-10) and civil society. The review process was overseen by the Commission’s Biodiversity Expert Group, under which four sectoral working groups were established to review the four sectoral Biodiversity Action Plans (the first of these working groups also addressed those provisions of the EC Biodiversity Strategy not addressed in any Action Plan). These groups reported to the Biodiversity Expert Group and were each co-chaired by the responsible DG (ENV, AGRI, FISH, DEV) and by a Member State or civil society representative. They carried out an 'audit' of implementation, effectiveness and appropriateness of the existing Strategy and Action Plans, and recommended priority measures towards meeting the political commitments a) to halt the loss of biodiversity (in the EU) by 2010, and b) to significantly reducing the rate of biodiversity loss (worldwide) by 2010. A fifth working group addressed the horizontal issues of indicators, monitoring and reporting. The principal output from this group was a proposal for a first set of EU biodiversity headline indicators. The working groups were open to representatives from all key stakeholders.

The research community was engaged through the European Platform for Biodiversity Research Strategy (EPBRS)9 and in particular through the Irish Presidency meeting of the EPBRS entitled ‘Sustaining Livelihoods and Biodiversity – Attaining the 2010 targets in the European Biodiversity Strategy’ held in Killarney 21-24 May 200410. The Killarney meeting

8 World Summit for Sustainable Development, Plan of Implementation, Paragraph 44, see:

http://www.un.org/esa/sustdev/documents/WSSD_POI_PD/English/ POIToc.htm 9 See http:///www.epbrs.org 10 See meeting website at: http://www.biodiversityresearch.ie/DesktopDefault.aspx?tabid=112

http://www.un.org/esa/sustdev/documents/WSSD_POI_PD/English/POIToc.htmhttp:///www.epbrs.orghttp://www.epbrs.org/

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adopted a declaration and recommendations on biodiversity research. Subsequent EPBRS meetings have developed and adopted an Action Plan for Biodiversity Research in Europe (work in progress)11.

The review process culminated in a conference held under the Irish Presidency in Malahide, Ireland 25-27 May 2004, entitled ‘Biodiversity and the EU – Sustaining Life, Sustaining Livelihoods’. Conference deliberations were informed by the substantive products from the five working groups and the EPBRS meeting.12 Malahide was attended by 230 participants representing a wide range of interests including delegates from 22 Member States, 1 non-Member State (Norway), conservation agencies and non-governmental organisations, and representatives of key economic sectors including agriculture, forestry, fisheries and industry. The main output of the stakeholder conference was the Message from Malahide. This document presents an unprecedented degree of consensus on priority objectives and detailed targets designed to meet the EU commitment to ‘halt the decline of biodiversity by 2010’13, and to optimise the EU contribution to the global commitment to ‘the achievement by 2010 of a significant reduction in the current [2002] rate of loss of biological diversity’14. The objectives and targets were evolved in four broadly-based working groups at the Conference, each group drawing membership from the various stakeholder groups present. Annex 1 to the Message from Malahide presented a first set of headline biodiversity indicators to monitor progress towards the 2010 commitments. Annex 2 to the Message from Malahide presented a declaration and recommendations on biodiversity research (based on the Killarney meeting outcomes). While not all conference participants gave their individual agreement to each objective and target, a remarkably high degree of consensus was achieved on all 18 objectives and 97 targets. The conference report15 (containing the Message from Malahide) is available online16.

1.4.2. Council Conclusions and Commission follow-up

Following the Conference, the Environment Council agreed on 28 June 2004 a set of Council Conclusions on Halting the Loss of Biodiversity by 201017. In these Conclusions, Council took note of the Message from Malahide and called on the Commission to report to Council and Parliament taking into account the findings of the policy review process and in particular

11 See http://www.epbrs.org/PDF/EPBRS-HU-HU-2005-Action_Plan_Release1_1.pdf 12 Conference papers are available at:

http://europa.eu.int/comm/environment/nature/biodiversity/develop_biodiversity_policy/malahide_conference/index_en.htm

13 Presidency Conclusions, Goteborg Council, 15 and 16 June 2001. SN/200/1/01 REV1, page 8. See: http://ue.eu.int/newsroom/newmain.asp?lang=1

14 Convention on Biological Diversity Decision VI/26 Annex (Strategic Plan) paragraph 11, see: http://www.biodiv.org/decisions/default.aspx?m=COP-06&id=7200&lg=0; and World Summit for Sustainable Development, Plan of Implementation, Paragraph 44, see: http://www.un.org/esa/sustdev/documents/WSSD_POI_PD/English/ POIToc.htm

15 Duke G. (ed) (2005) Biodiversity and the EU – Sustaining Life, Sustaining Livelihoods. Conference Report. Stakeholder Conference held under the Irish Presidency of The European Union in partnership with the European Commission, 25th - 27th May 2004, Grand Hotel, Malahide, Ireland. Department of Environment, Heritage and Local Government, Republic of Ireland.

16 See: http://europa.eu.int/comm/environment/nature/biodiversity/develop_biodiversity_policy/malahide_conference/index_en.htm

17 Environment Council Conclusions of 28 June 2004. ‘Halting the loss of biodiversity by 2010.’ Document no. 10997/04

http://www.epbrs.org/PDF/EPBRS-HU-HU-2005-Action_Plan_Release1_1.pdfhttp://europa.eu.int/comm/environment/nature/biodiversity/develop_biodiversity_policy/malahide_conference/index_en.htmhttp://europa.eu.int/comm/environment/nature/biodiversity/develop_biodiversity_policy/malahide_conference/index_en.htmhttp://ue.eu.int/newsroom/newmain.asp?lang=1http://www.biodiv.org/decisions/default.aspx?m=COP-06&id=7200&lg=0http://www.un.org/esa/sustdev/documents/WSSD_POI_PD/English/POIToc.htmhttp://europa.eu.int/comm/environment/nature/biodiversity/develop_biodiversity_policy/malahide_conference/index_en.htmhttp://europa.eu.int/comm/environment/nature/biodiversity/develop_biodiversity_policy/malahide_conference/index_en.htm

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the Message. Council also highlighted in these Conclusions a number of issues identified in the Message from Malahide and encouraged Member States to act upon these.

The need for accelerated action to meet the 2010 target was also reiterated by EU Heads of State and Government at the European Council of 17-18 June 2004 which notably linked this target to the Lisbon Reform Agenda18.

In response, the Commission then began work to draft the present Communication. Consultation with services and external stakeholders was continued through the Biodiversity Expert Group (meetings of 11 January, 28 June and 15 November 2005), and through the Inter-Departmental Coordination Group on Biodiversity (EU Implementation) (meetings of 15 July 2004, 9 November 2005, 2 February 2006). Written expert consultation was held (through the Biodiversity Expert Group) on advanced draft texts of the prescriptive sections of the Communication and on the Road Map (now named ‘Action Plan’) between November 2005 and February 2006. A parallel internet public consultation on the Communication was held between 12 December 2005 and 6 February 2006.

Care has been taken in the Communication and Impact Assessment to take the Message from Malahide and subsequent expert consultation into account. The key policy areas, priority objectives and supporting measures identified in the Communication relate closely to the objectives of the Message from Malahide, while the targets and actions of the Action Plan relate closely to the targets of the Message from Malahide. The Commission has removed duplication where possible, and adjusted targets and actions both to take account of developments post-Malahide, and to make targets more outcome-oriented and SMART (Specific, Measurable, Achievable, Realistic, Timed ).

1.4.3. Results of the web consultation

A full report of the web consultation is provided on Europa19. The public consultation ran for 8 weeks and received a total 1,455 responses. The great majority of the respondents (75%) found the survey and the questionnaire satisfactory and adequate to address the issues explored, while around 20% complained about the fact that the survey had been conducted in the English language only.

Of the respondents, 93.5% agreed with the proposed policy option (‘Road Map to 2010 and Beyond’– now re-named ‘EU Action Plan to 2010 and Beyond’), 4% proposed an alternative option, and only 2.5% preferred the ‘business as usual’ option. Most of the proposed ‘alternative options’ in fact suggested actions already covered by the proposed Road Map. There were a few suggestions for a more comprehensive legislative framework on biodiversity (in a possible form of a Directive) and others stressing the need for more resources to research on ecosystems and biodiversity. A few responses also noted the need for wider changes in individual and societal behaviour such as patterns of consumption. Several advocated wider and stronger use of the precautionary principle.

However, the vast majority of respondents (over 92% in each case) agreed or strongly agreed with all 10 key challenges (now all but one identified as ‘objectives’ in the Communication – the exception being ‘policy impact assessment’ which is now addressed under supporting measures) and all 5 delivery measures (now all but one identified as ‘supporting measures’ in

18 Presidency conclusions, European Council, 17-18 June 2004. 19 http://europa.eu.int/comm/environment/consultations_en.htm

http://europa.eu.int/comm/environment/consultations_en.htm

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the Communication – the exception being ‘knowledge’ which is now among the objectives) proposed. In almost all cases, those disagreeing or strongly disagreeing were under 2% of respondents. The measures attracting most disagreement were those related to invasive alien species and climate change – but even here less than 8% of respondents disagreed.

82% of respondents responded as individuals, 18% on behalf of organisations. Non-governmental organisations, public sector and academic organisations were relatively equally represented among the organisational respondents, businesses rather less so. The main areas of activity of respondents were nature conservation, general environment, education and awareness, research, and agriculture/forestry. However development aid, fisheries/marine, infrastructure/transport/construction/mining, property/land management and business/enterprise/manufacturing were cited as areas of activity by at least 5% of respondents. Almost 88% of the respondents had no prior involvement in this review and policy development process.

There were marked differences between Member States. Over 86% of respondents were from 10 Member States with France (19.2%), Italy (14.4%), Portugal (11.6%), UK (10.7%), Belgium (9%), Germany (7.6%) and Spain (7.4%) providing most responses. There was particularly low level of response from the new Member States which may indicate a lower level of awareness of the issues in these countries, or unfamiliarity of their citizens with such consultations. More responses were received from the Acceding Countries (Bulgaria 3.2%, Romania 0.5%) than from all the new Member States put together (total c.4.3%). The low response from many Member States may partly be explained by the language constraint. Less than 1% of responses were from countries other than EU Member States and the Acceding Countries, these being Switzerland, Australia, Turkey, Norway and Cayman Islands.

2. PROBLEM DEFINITION

2.1. What is biodiversity and what are ecosystem services, and how are they linked?

Biodiversity, or biological diversity, is the variety of life on Earth. Biodiversity is expressed at three levels – the diversity of ecosystems, the diversity of species, and the diversity of genes. Humans are part of biodiversity and depend on many life support systems provided by biodiversity and ecosystems.

Ecosystems provide a stream of services, the continued delivery of which is essential to our economic prosperity, security, health and other aspects of our quality of life20. These ‘ecosystem services’ include the air we breathe, and the provision of goods such as food, fibre, fuel, freshwater and medicines. They include the regulation of climate, flooding, disease and water quality. They include essential supporting services such as soil formation, nutrient cycling, pollination and primary production. And they include cultural services such as aesthetic, educational, recreational, psychological and spiritual benefits.

Examples of such ecosystem services from various ecosystem types are shown in Figure 1, and the links between these services and human well-being are shown in Figure 2.

20 The 2005 Millennium Ecosystem Assessment describes ecosystems as “the complex of living

communities (including human communities) and non-living environment (Ecosystem Components) interacting (through Ecological Processes) as a functional unit which provides inter alia a variety of benefits to people (Ecosystem Services).”

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There is strong scientific consensus on the link between biodiversity and the flow of ecosystem services. An important review21 of scientific understanding in this regard found that changes in biodiversity have strong potential to alter ecosystem properties and the goods and services they supply to humanity. The review concluded:

‘Ecological experiments, observations and theoretical developments show that ecosystem

properties depend greatly on biodiversity in terms of the functional characteristics of

organisms present in the ecosystem and the distribution and abundance of those organisms

over space and time. Species effects act in concert with the effects of climate, resource

availability and disturbance regimes in influencing ecosystem properties”.

The more we lose biodiversity, the more ecosystem services are put at risk.

Figure 1 – Examples of ecosystem services

21 Hooper, D. et al. (2005) Effects of biodiversity on ecosystem functioning: a consensus of current

knowledge. Ecological Society of America Report. Ecological Monographs 75(1) pp3-35.

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Figure 2 Consequences of Ecosystem Change for Human Well-Being

2.2. What is happening to biodiversity and ecosystem services?

2.2.1. Loss, fragmentation and degradation of ecosystems

The world’s ecosystems can be grouped into major ‘biomes’. The Millennium Ecosystem Assessment found that man has converted a large proportion of the world’s biomes (Figure 3). More than two thirds of the area of two biomes and more than half of the area of four others had been converted by 1990.

Europe is no exception. Indeed, Europe’s nature is possibly more greatly modified by man than that of any other continent. In the absence of man, Europe would today be almost entirely forested. Europe’s deforestation commenced in prehistoric times, accelerated with the spread of agriculture 3000-4000 years ago, and continued through Greco-Roman and Medieval times and the Industrial Revolution. While this clearance led to the widespread loss of forest ecosystems, it introduced to the European landscape a new diversity of agricultural, grassland and wetland ecosystems. Very little of the EU remains true wilderness. Yet until recent decades, Europe has continued to support a rich variety of wildlife. Traditional forms of agriculture and other land uses often created habitats favourable to wildlife and the maintenance of ecological processes and functions.

However, in the last fifty years of so, the pace and scale of developments has led to an increasing loss, degradation and fragmentation of habitats – to the extent that it was felt necessary, in 1992, to list some two-thirds of EU habitat types in the Habitats Directive as requiring special attention for their conservation. The intensification of agriculture and forestry, and the spread of urban areas and growth of transport infrastructure, have been prime

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causes of this. The Millennium Ecosystem Assessment found that Europe’s ecosystems have suffered more man-induced fragmentation than those of any other continent (Figure 4)22.

Figure 3: Fraction of world’s major biomes converted by man

Source: Millennium Ecosystem Assessment

22 Mace, G. (2005) The current status of global biodiversity. Address to the international scientific

conference: Biodiversity Science and Governance, Paris, January 2005

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Figure 4: Anthropogenic fragmentation of ecosystems in the EU25

Extensive fragmentation occurs across most of EU-25 with limited fragmentation found only in mountainous and/or forested, low population areas, for example in Sweden, Finland, north-west parts of Scotland and Spain and the Alps, the Pyrenees and Carpathians

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Figure 5: Proportions of undisturbed, semi-natural and plantation forests in EU

The Ministerial Conference on the Protection of Forests in Europe classifies forest as ‘undisturbed by man’, semi-natural and plantations. EU-25 forests are mainly semi-natural with the largest areas of ‘undisturbed by man’ forests located in northern Sweden and northern Finland. These remnants of ‘undisturbed’ forests are of high importance biodiversity. Countries with large proportions of plantations are Ireland, Denmark, Malta and the United Kingdom. The degree of naturalness of forest ecosystems reflects the intensity of human intervention. Different levels of utilisation intensity are characterised not only by changing structures but also by different species communities and thus influence the biological diversity of an area.

0%

20%

40%

60%

80%

100%

Malta

United Kingdom

Belgium

Netherlands

Cyprus

Czech Republic

Germany

Hungary

Spain

Italy

Estonia

Denmark

Latvia

Ireland

France

Lithuania

Austria

Slovakia

Poland

Portugal

Slovenia

Finland

Sweden

Undisturbed by man Semi-natural Plantations

Source: Ministerial Conference on the Protection of Forests in Europe

While the majority of western Europe’s forests and woodlands are semi-natural, only 1-3% can be classed as ‘old-growth’ (Figure 5)23. Since the 1950s, Europe has lost more than half of its wetlands, and most of its once species-rich farmland (only 15-25% of European farmland

23 Halka A. and Lappalainen, I. (2001) La protection des forets en Europe. Gland, World Wide Fund for

Nature.

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can now be said to be of high nature value24). Many of the EU’s marine ecosystems are disrupted25. Even Europe’s most protected places are subject to habitat loss and degradation; the County of Cornwall in the UK, for example, lost 550 ha of habitat from protected areas in the period 1987-199526.

Continuing habitat loss in Europe is confirmed by the most recent state of the environment report from the European Environment Agency (Figure 6)27. Changes in habitats during the 1990s included increases in artificial habitats (5 %) and in inland surface water (some 2.5 %), due to the creation of dams, and losses in heath, scrub and tundra (some 2 %) and wetland mires, bogs and fens (c.3.5%).

Figure 6: Changes in areas of major EU habitat types from 1990 to 2000

Source: EEA

The recent Second Global Biodiversity Outlook confirms that biodiversity is being lost at all levels28.

2.2.2. Loss of species and reduction in species’ populations

There is scientific consensus that the loss of species has strong potential to alter ecosystem properties and the goods and services they supply29. Species declines therefore signal significant risks to our economies and societies.

24 EEA (2006) The European Environment State and Outlook 2005 25 EEA (2006) The European Environment State and Outlook 2005 26 See: http://www.erccis.co.uk/index.htm 27 EEA (2006) The European Environment State and Outlook 2005. 28 CBD (2006) Summary of the Second Global Biodiversity Outlook.

http://www.erccis.co.uk/index.htm

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Recorded rates of species decline are alarming. In Europe, records show significant declines in diversity, populations and distribution of a wide range of species in all major groups. While some rare species, the subject of targeted action, are showing signs of recovery, many species remain threatened, including 42% of native mammals, 43% of birds30, 45% of butterflies, 30% of amphibians, 45% of reptiles and 52% of freshwater fish. Many fish stocks are being exploited outside safe biological limits and some are in danger of collapse (Figure 7)31. There are clear declines in invertebrates such as butterflies32 as well as crashes in important pollinator populations33. And some 800 plant species in Europe are at risk of global extinction34.

Worldwide, the rate of extinction of species has greatly accelerated above the natural background rate. The fossil record and statistical studies suggest that the average rate of extinction over the past hundred million years has hovered at several species per year. Human activities have increased the species extinction rate by 100 times compared to the natural rate observed in the fossil record35, taking the planet to the edge of a massive wave of species extinctions, further threatening our own well-being. In contrast, new species are evolving at a rate of less than one a year. In 2004, the World Conservation Union’s Red List said more than 15,500 species (out of around 38,000 assessed) faced some extinction risk, including 20% of all known mammal species, 12% of all known bird species, 31% of all known amphibian species, and 31% of all known gymnosperm species (conifers and their allies)36 – not to mentioned the millions of unknown (but possibly more economically important) microbes.37 The latest 2006 Red List just launched has highlighted that this species decline appears to be accelerating worldwide38.

Not only are species going extinct, the populations of most of those remaining are being fragmented, and reduced in size and range. For example, European bird and butterfly populations show marked declines (Figures 8, 9). Further, nature is becoming increasingly ‘homogenized’ – with so-called ‘weedy species’ dominating over the more specialist species39.

29 Hooper, D. et al. (2005) Effects of biodiversity on ecosystem functioning: a consensus of current

knowledge. ESA Report. Ecological Monographs 75(1) pp3-35. 30 BirdLife International 2004. Birds in Europe: population estimates, trends and conservation status.

Cambridge, UK: Birdlife International (BirdLife Conservation series no.12) 31 EEA (2006) The European Environment State and Outlook 2005. 32 Swaay, C. and Warren, M. (eds.) (2003) Prime butterfly areas in Europe: Priority sites for

conservation. National Reference Centre for Agriculture, Nature and Fisheries, Ministry of Agriculture, Nature Management and Fisheries, The Netherlands.

33 See, for example, BBC report on bee decline in France in 2003: http://news.bbc.co.uk/1/hi/world/europe/3178400.stm

34 See: http://www.plantaeuropa.org/ 35 Mace (2005) The current status of global biodiversity. Presentation to the international conference on

Biodiversity Science and Governance, Paris, January 2005. 36 IUCN Red List 2004, summary statistics: http://www.redlist.org/info/tables/table1.html 37 Adapted quote, Lord May, President UK Royal Society:

http://news.bbc.co.uk/1/hi/sci/tech/3667300.stm 38 http://www.iucn.org/themes/ssc/redlist2006/redlist2006.htm 39 Meyer, S. (2004). End of the Wild. Boston Review April/May 2004.

http://www.bostonreview.net/NR29.2/meyer.html

http://news.bbc.co.uk/1/hi/world/europe/3178400.stmhttp://www.plantaeuropa.org/http://www.redlist.org/info/tables/table1.htmlhttp://news.bbc.co.uk/1/hi/sci/tech/3667300.stmhttp://www.bostonreview.net/NR29.2/meyer.html

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Figure 7: Status of commercial fish stocks in European seas 2003-04

Many commercial fish stocks in European waters remain non-assessed. Of the assessed fish stocks in the NE Atlantic, 22% to 53% are outside safe biological limits (SBL). Of the assessed stocks in the Baltic Sea, the West Ireland Sea and the Irish Sea, 22, 29 and 53% respectively are outside SBL. In the Mediterranean, the percentage of stocks outside SBL range from 10-20%.

Source: EEA

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Figure 8: Changes in bird and butterfly populations, EU-25.

Butterfly and bird species occurring in different habitat types across the EU show population declines of between -2% and -37% since the early 1970s. Similar trends can be observed in the land-cover change for related habitats between 1990 and 2000, especially for heaths and scrubs as well as mires, bogs and fens, which are specific wetland habitats. (The numbers in brackets show the number of species taken into account for each habitat type. The bird trends reflect the period 1980-2002. The butterfly trends reflect the period 1972/73-1997/98.)

Source: EEA

Figure 9: Trends of farmland birds’ population in Europe

This indicator has been adopted as a structural indicator and as a sustainable development indicator by the Commission. The period considered as representative for the whole of Europe is limited to 1990-2005. The period from 1980 to 1990 is only based on a very limited number of Member States and the trend observed in each of these countries is variable. Thus, the period before 1990 on the graph below is not completely representative of farmland bird populations in Europe.

Source: European Bird Census Council/Royal Society for the Protection of Birds/BirdLife International/Statistics Netherlands

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2.2.3. Loss of genetic diversity

With every species extinction, a set of genes particular to that species is irreversibly lost. However, genetic variety is also lost well before the ultimate extinction of a species. As the number of individuals within a species population declines, the variety of genes found within the remaining population also declines. This loss of genetic diversity reduces the ability of species to adapt to pressures, making the remaining population more vulnerable. It also reduces opportunities for mankind to benefit from genetic variety – for example to breed new varieties of crops or livestock. Indeed, the loss of genetic variety is of serious concern in agriculture, fisheries, forestry and horticulture.

For example, the Food and Agriculture Organisation of the United Nations (FAO) estimates that somewhere in the world at least one breed of traditional livestock dies out every week. Many traditional breeds have disappeared as farmers focus on new breeds of cattle, pigs, sheep, and chickens. Of the 3,831 breeds of cattle, water buffalo, goats, pigs, sheep, horses, and donkeys believed to have existed in this century, 16 percent have become extinct, and a further 15 percent are rare. Some 474 of extant livestock breeds can be regarded as rare.40 Europe is home to a large proportion of the world’s domestic livestock diversity with over 2500 breeds registered in the FAO breed’s database – yet a large proportion of these European breeds are threatened.

Similarly, Europe hosts a wide range of plants varieties while the genetic diversity of crops used in agricultural production has decreased. The depletion of fish stocks and resulting decline in genetic diversity within stocks can undermine the chances of future stock recovery. The increasing use of conventionally-bred plants in agriculture, horticulture and forestry – including those used for sowing pastures, hay meadows and amenity areas - threatens indigenous varieties.

2.2.4. Decline in ecosystem services

While there are still many uncertainties regarding the extent to which we can afford to lose biodiversity and yet retain vital ecosystem services, there is sufficient evidence to justify taking a precautionary approach in line with the Treaty. The more we damage and degrade ecosystems (whether forests, grasslands, drylands, wetlands, mountains or marine) and the more species we remove from the complex web of life, the greater the risk that essential ecosystem services are compromised.

Indeed, we have already greatly compromised the world’s ecosystem services. The 2005 Millennium Ecosystem Assessment41 confirms that humans have made unprecedented changes to ecosystems in recent decades to meet growing demands for food, fresh water, fibre, energy. These changes have improved the lives of billions, but at the same time have weakened nature’s ability to deliver other key services such as purification of air and water, protection from disasters, and the provision of medicines. Worldwide, some two-thirds of the ecosystem services on which humankind depends are in decline (Figures 10a and 10b).

40 Thrupp, L.A. (1998) Linking Biodiversity and Agriculture: Challenges and Opportunities for

Sustainable Food Security. World Resources Institute. http://www.wri.org/wri/sustag/lba-home.html 41 Millennium Ecosystem Assessment Statement of the Board:

http://www.maweb.org/en/Products.BoardStatement.aspx

http://www.wri.org/wri/sustag/lba-home.htmlhttp://www.maweb.org/en/Products.BoardStatement.aspx

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There is established but incomplete evidence that changes being made in ecosystems are increasing the likelihood of nonlinear changes in ecosystems (including accelerating, abrupt, and potentially irreversible changes), with important consequences for human well-being. Thresholds exist within ecosystems which, if crossed, cause the ecosystem to switch to a different structure or functioning. Generally, the more diverse an ecosystem, the further it is from such a threshold and thus the more resilient it is to pressures. The loss of species and genetic diversity, and increasing pressures, push ecosystems towards such thresholds.

There is substantial evidence of the decline of ecosystem services in Europe. This evidence includes increasing frequency and severity of flooding events (aggravated by deforestation of watersheds, construction on floodplains, canalisation of rivers), widespread loss of soil fertility, sporadic collapses in pollinator populations (possibly caused by pesticides), the spread of diseases is crops and forests (facilitated by monocultures), and the accelerating release of carbon from the soil (possibly due to global warming). In some cases – such as in the Baltic Sea - thresholds may already have been passed.

Figure 10a: Status of Provisioning Services

�Fresh water

�Biochemicals, medicines

�Genetic resources

�wood fuel

+/–cotton, silk

+/–timberFiber

�wild foods

�aquaculture

�capture fisheries

�livestock

�cropsFood

StatusService

�Fresh water

�Biochemicals, medicines

�Genetic resources

�wood fuel

+/–cotton, silk

+/–timberFiber

�wild foods

�aquaculture

�capture fisheries

�livestock

�cropsFood

StatusService

Source: Millennium Ecosystem Assessment

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Figure 10b: Status of Regulatory and Supporting Services

S ta tu s

+ /–R e c re a t io n a n d e c o to u r ism

�A e s th e t ic v a lu e s

�S p ir itu a l a n d re lig io u s v a lu e s

C u ltu ra l S e r v ic e s

�N a tu ra l h a z a rd re g u la t io n

�P o llin a t io n

�P e s t re g u la t io n

+ /–D is e a s e re g u la t io n

�W a te r p u r if ic a t io n a n d w a s te t re a tm e n t

�E ro s io n re g u la t io n

+ /–W a te r re g u la t io n

�C lim a te re g u la t io n – re g io n a l a n d lo c a l

�C lim a te re g u la t io n – g lo b a l

�A ir q u a l ity r e g u la t io n

R e g u la t in g S e r v ic e s

S ta tu s

+ /–R e c re a t io n a n d e c o to u r ism

�A e s th e t ic v a lu e s

�S p ir itu a l a n d re lig io u s v a lu e s

C u ltu ra l S e r v ic e s

�N a tu ra l h a z a rd re g u la t io n

�P o llin a t io n

�P e s t re g u la t io n

+ /–D is e a s e re g u la t io n

�W a te r p u r if ic a t io n a n d w a s te t re a tm e n t

�E ro s io n re g u la t io n

+ /–W a te r re g u la t io n

�C lim a te re g u la t io n – re g io n a l a n d lo c a l

�C lim a te re g u la t io n – g lo b a l

�A ir q u a l ity r e g u la t io n

R e g u la t in g S e r v ic e s

Source: Millennium Ecosystem Assessment

Figure 11: Collapse of Atlantic cod stocks of the East coast of Newfoundland

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2.3. What is causing biodiversity loss and the degradation of ecosystem services?

2.3.1. Key pressures and drivers of loss

The main causes of biodiversity loss are well known. The principal cause is the destruction, degradation and fragmentation of habitats – for example as a result of conversion (eg. from forest to agriculture), intensification of production systems, or construction. Other pressures include over-exploitation (eg. unsustainable levels of fishing), the spread of invasive alien species and pollution. Examples are given in Figure 11 (collapse of fish stocks) and Figures 12 and 13 (nutrient pollution).

These direct pressures are the manifestation of a range of underlying driving forces42. These include: demographic drivers (eg population growth, increased housing demand); macro-economic drivers (eg. economic growth where not de-coupled from environmental impact); sectoral developments (eg. growth in transport demand); technological developments (eg. new energy technologies); and social and cultural drivers (eg. developments in social values and preferences, consumption patterns, etc.). The relative importance of each these pressures and drivers varies from place to place. Very often, several pressures and drivers act in combination, complicating action for the conservation and sustainable use of biodiversity.

A key aspect of the economic drivers of biodiversity loss is that of market failure. The benefits of biodiversity – whilst real and significant – are often not marketed and so actors do not have an incentive to take them into account in their decisions. In particular, local decision-makers have only a weak incentive to take on board wider national and global impacts of biodiversity. This means that the market, when left to itself, leads to over exploitation. Public authorities have a particular responsibility to provide a suitable framework that encourages environmentally responsible behaviour and discourages activities that damage biodiversity and ecosystem services. This is likely to require a reform of the financial system at a global scale (eg. internalising environmental costs in the financial system).

Added to these pressures and drivers, there are the increasing pressures from climate change and unchecked globalisation. Historic, directly measured, and projected changes in global temperatures are shown in Figure 14. The effects of climate change on biodiversity are already observable, and profound effects are to be expected over the next few decades as unavoidable climate change takes place (Figure 15)43. For example, more than half of Europe’s plant species could be vulnerable or threatened by 208044. For many species, the ‘climate space’ within which they thrive will move faster than they can adapt. The threat of climate change reinforces all the more the need to address existing pressures and to maintain ecosystem processes and functions. Much as a healthy human with a strong immune system is better able to respond to infection, healthy ecosystems which are diverse and fully-functioning will be better able to respond to climate change.

42 EEA (2006) The European Environment – State and Outlook 2005. 43 See for example: Parmesan, C. and Yohe, G. (2003) A globally coherent fingerprint of climate change

impacts across natural systems. Nature 421, 37-42. 44 Thuiller, W. et al. (2005) Climate change threats to plant diversity in Europe. Proc. Nat. Acad. Sci.

Early Edition www.pnas.org/cgi/doi/10.1073/pnas.0409902102

http://www.pnas.org/cgi/doi/10.1073/pnas.0409902102

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Globalisation increases pressure on natural systems in developing countries. For example, it increases the incentives for over-exploitation of natural systems to feed the export market. And the explosion of global transport facilitates the spread of invasive alien species.

Figure 12: Human input of nitrogen to ecosystems (worldwide)

Figure 13: Exceedance of nutrient critical loads in EU

While there was some improvement in the extent of nutrient pollution of EU ecosystems from 1980 to 2000, nutrient pollution still exceeded critical loads for almost 80% of EU terrestrial ecosystems in 2000, and the rate of improvement has tailed off since then.

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Source: EEA

Figure 14. Global changes in temperature – historic and projected

Figure 15: Changing plankton communities in the Central North Sea

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The past decade has seen a marked change in the relative abundance of zooplankton in the North Sea. The warm-water copepod Calanus helgolandicus has become more than twice as abundant as the cold-water species Calanus finmarchicus. These data are illustrative of a general trend for zooplankton populations to shift northwards in response to changing climatic conditions. The composition of the marine ecosystem has been changing since the mid 1980s in the North Sea, a trend that directly affects fish populations and consequently fisheries. Projections show that global warming will increasingly change the composition of the ecosystems in the oceans and cause a shift by warm-water species towards higher latitudes.

Source: EEA

2.4. Why do the loss of biodiversity and degradation of ecosystem services matter?

Humanity is entirely dependent upon plants, animals and other organisms that form the world’s biological diversity (or biodiversity) and on the flow of ecosystem services. Examples of the values of the various types of ecosystem services – to both developed and developing countries - are provided in the sections below.

2.4.1. The value of provisioning services

The value of ecosystem provisioning services are perhaps most clearly seen when they are lost. For example, over-fishing has reduced most EU fish stocks to below safe biological limits, and resulted in a severe reduction in fish landings over recent decades. In the UK alone, total landings of major fish species by UK vessels in UK ports declined from some 900,000 tonnes to 400,000 tonnes between the mid-1960s and 1999 and the value of the landed catch, corrected for inflation and in 1999 prices, fell from a peak of some £880m to just £196m.45 The dependence of modern agriculture on a small number of varieties and breeds, and the loss of local breeds and varieties, reduces the genetic material available for breeding and genetic engineering, putting our future food security at risk. Ecosystems and the species within them are also an important source of medical products. For example, Tamiflu, the only defence the world currently has against the threatened flu pandemic, derives its active ingredient from a rare Chinese tree.46

45 WWF (2001) Now or never. The cost of Canada’s cod collapse and disturbing parallels with the UK. 46 BCGI online 18 October 2005. Bird Flu Medicinal Herb Shortage:

http://www.bgci.org/news/anise_treats_birdflu.html

http://www.bgci.org/news/anise_treats_birdflu.html

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2.4.2. The value of regulating services

Recent major natural disasters – including Hurricane Katrina, the Asian tsunami, and floods in central Europe bring into sharp focus the value of ecosystem regulating services. In the former two cases, massive loss of protective coastal ecosystems (mangroves and other wetlands) increased the exposure of coastal communities47,48. In Central Europe, loss of natural floodplains and canalisation of natural channels exacerbated flooding49.

In the US, payment is increasingly made for such ecological services. For example, in 1997, New York realised that changing agricultural practices meant it would need to act to preserve the quality of the city’s drinking water. One way to have done this would have been to install new water-filtration plants, but that would have cost $4-6 billion up front, together with annual running costs of $250 million. Instead, the government is paying to preserve the rural nature of the Catskill Mountains from which New York gets most of its water. It is spending $250 million on buying land to prevent development, and paying farmers $100 million per year to minimise water pollution50.

2.4.3. The value of supporting services

The value of ecosystem supporting services is less easily valued and marketed. An example is that of pollinators, which provide a service valued at $65-70 billion/year worldwide. Marked declines in insect pollinators have been recorded in parts of Europe, and also in the US, with significant impact on many crop yields51. Without the ecosystem services of nutrient cycling and soil formation, waste processing costs and agricultural input costs would soar.

2.4.4. The value of cultural services

Cultural ecosystem services are less easily monetarised, but this does not mean they are less important than nature’s other services. We derive from nature pleasure, fulfilment, inspiration and solace. Nature is fundamental to our culture, language, psychological, physical and spiritual wellbeing. Nature is also a knowledge resource for education, scientific and historic discovery52. And finally, throughout history, many – of both religious and secular beliefs – have argued that biodiversity has its own, intrinsic value and that we have a moral duty to ensure its good stewardship53.

2.4.5. The importance of ecosystem services in developing countries

Outside the EU, ecosystem services are essential to poverty eradication in Africa and other developing parts of the world. 75% of the world’s poor are rural poor, who depend directly on

47 Reichhardt, T. (2004) Hurricane Ivan highlights future risk for New Orleans. Nature 431, 388 48 For article on tsunami and mangroves, see :

http://www.scidev.net/News/index.cfm?fuseaction=printarticle&itemid=1823&language=1 49 EEA. 2005. Climate change and river flooding in Europe. EEA Briefing 01/2005. Also: COM (2006)

15 final, Proposal for a directive of the European Parliament and of the Council on the assessment and management of floods.

50 The Economist, 21 April 2005. 51 Kevan, P.G. and Phillips, T. (2001) The economic impacts of pollinator declines: an approach to

assessing the consequences. Conservation Ecology 5, i. 52 English Nature (2002) Revealing the value of nature. 53 Glacken, C. (1990) Traces on the Rhodian Shore. Nature and culture in western thought from ancient

times to the end of the Eighteenth Century. University of California Press.

http://www.scidev.net/News/index.cfm?fuseaction=printarticle&itemid=1823&language=1

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natural systems for their livelihood. The continued loss of ecosystem services will make it impossible to meet the Millennium Development Goals related to poverty eradication, health, water and environment54, 55,56.

Moreover, the EU depends for its growth and well-being upon the ecosystem goods and services of these third countries. Indeed, it has recently been estimated that it now requires two continents of the size and fecundity of modern-day Europe to maintain the continent in the style to which we have become accustomed57. It is an uncomfortable reality that the European market, along with that of other developed countries, is the destination for much of the illegally felled timber that is resulting in the destruction of tropical forests. As biodiversity declines and the goods and services it supplies become scarcer, competition for these goods and services will intensify, threatening global and European security.

2.4.6. Costs of non-action

The costs of non-action are potentially immense – in terms of lost assets, goods and services.

The degradation of ecosystem services represents the loss of ‘natural capital’. The loss of this capital (or wealth) due to ecosystem degradation is however not reflected in conventional national accounts. For example, a country could cut its forests and deplete its fisheries, and this would show only as a positive gain in Gross Domestic Product (GDP) without registering the corresponding decline in assets (wealth). A number of countries that appeared to have positive growth in net savings (wealth) in 2001 actually experienced a loss in wealth when degradation of natural resources was factored into the accounts.

Estimates put the value of ecosystem goods and services at hundreds of billions of Euros per year58,59. When ecosystem services are taken into account, the net present value of natural and sustainably managed ecosystems is frequently higher than that of converted and intensively managed systems (see Figure 16). A recent study commissioned by DG Environment provides a range of case studies documenting EU examples where biodiversity loss has led to the loss of ecosystem services and economic costs60.

Further, restoring degraded ecosystems, or substituting artificially for these biodiversity goods and services where natural systems fail is frequently much more costly than looking after them in the first place. The control of invasive alien species is a good example. The economic damages caused by invasive alien species and the costs of controlling and eliminating them amount to billions of Euros per year - far greater than the costs of preventing their

54 Millennium Ecosystem Assessment, Statement of the MA Board.

http://www.maweb.org/en/Products.BoardStatement.aspx 55 Malloch Brown, M. (2004) Conserving Biodiversity for Development. Opinions, Science and

Development Network. http://www.scidev.net/Opinions/index.cfm?fuseaction=readopinions&itemid=240&language=1

56 World Resources Institute. World Resources 2005. 57 WWF (2005) Europe 2005 The Ecological Footprint. 58 Heal, G. (2005) The costs of policy inaction with respect to biodiversity loss. Prepared for OECD High

Level Special Session on Costs of Inaction, 14 April 2005. 59 Perrings, C. (2005) Economics and the value of ecosystem services. Address to the international

scientific conference Biodiversity Science and Governance, Paris, January 2005 60 Kettunen, M. & ten Brink, P (2006) Value of biodiversity – documenting EU examples where

biodiversity loss has led to the loss of ecosystem services. Final report to the European Commission. Institute for European Environmental Policy (IEEP), Brussels. (Draft final report)

http://www.maweb.org/en/Products.BoardStatement.aspxhttp://www.scidev.net/Opinions/index.cfm?fuseaction=readopinions&itemid=240&language=1

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introduction. Control of the zebra mussel, for example, a shellfish which rapidly multiplies and clogs the cooling systems of coastal industrial plants, cost US and European businesses around Euro 1 billion in the period 1998-200061. These costs – which fall upon both public and private sectors - undermine competitivity and growth.

61 National aquatic nuisances clearinghouse 2000, cited in Wittenberg, R, Cock, M (eds) (2001) Invasive

Alien Species: A toolkit of best prevention and management practices. CAB International, Oxon, UK.

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Figure 16: Comparison of net present value of natural and sustainably managed

ecosystems with converted and intensively managed systems

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2.5. Who is affected and to what extent?

The loss of biodiversity, and the consequent decline in natural capital and in the flow of ecosystem services, affects everyone, but some more than others. Very often, it is the rural poor in developing countries who are most severely affected by biodiversity loss – for they are most immediately dependent on ecosystem services. There are increasing areas of the world where biodiversity loss and the decline of ecosystem services has reached the point of ecological collapse, resulting in malnourishment, famine and conflict.

However, as section 2.4 indicates, many in developed countries, including the EU are also affected – whether farmers or fishermen, private or public sector, the insurance industry or the general public. The extent of the impacts felt by these various societal groups are very variable, ranging from the emotive distress felt at the loss of local landscape features to severe economic and social disruption, such as that caused by collapsing fish stocks, or storm damages unmitigated by natural coastal defences.

In most cases, those who benefit in each case from biodiversity loss and the degradation of ecosystem services are small interest groups and the benefit is short-term – while the negative impacts of the loss and degradation are felt by a wider cross-section of society and are often long-term, affecting both current and future generations. As already mentioned, this is in part due to the failure of markets to internalise these social and environmental costs of biodiversity loss.

2.6. What have we done about it so far?

This section provides a review of implementation, effectiveness and appropriateness of the EC Biodiversity Strategy and Action Plans.62

2.6.1. Progress with implementation – EU internal dimension

2.6.1.1. Dedicated nature policy

The Birds Directive63 and the Habitats Directive64 provide the cornerstone of action for biodiversity in the EU. They provide for the designation and effective management of areas representing Europe’s most important habitats, and the protection of Europe’s most threatened species. Substantial progress has been made in implementation of these nature directives. The Natura 2000 network now covers some 18% of the territory of the EU-15 and is now being extended to the EU-10 and the marine environment. This network - complimented by other protected areas recognised at national, regional or local levels - represents the EU’s main ‘reservoir’ of biological diversity, and is essential to maintaining the vital stream of ecosystem services. The nature directives also provide for species-specific measures such as recovery plans which are proving beneficial for some of the EU’s most endangered species.

With establishment of the network approaching completion, the next challenge is the effective management of the network which will require substantial funding. Limited but effective co-

62 Further details (for the period to early 2004) may be found in the audit reports submitted to the

Malahide Conference, see footnote 13 63 Directive of 2 April 1979 on the conservation of wild birds (79/409/EC), OJ L 103, 25.4.1979, p.1. 64 Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats of wild fauna and flora, OJ

L 206, 22.7.1992, p.7.

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financing of Natura 2000 has been provided to date through the LIFE Nature fund. New ways of providing enhanced co-financing through rural development and cohesion funds have been proposed by the Commission65. However, the recent Council decision on the Financial Perspectives66 is likely to result in limited availability of community co-financing for Natura 2000. This means that Member States will have a greater responsibility to ensure adequate financial resources are available.

Despite this progress made, a large proportion of the complaints received by the Commission relate to alleged infringements of the Nature Directives. While not all complaints are upheld, the volume of complaints tends to suggest substantial continuing threats to priority habitats and species, a need to reinforce efforts for full implementation of the Directives, and in particular to raise awareness of the benefits of Natura 2000.

2.6.1.2. Other environmental policy

Biodiversity is an over-arching goal of environmental policy, as expressed in the Sustainable Development Strategy67, in the Commission Working Document on Better Regulation and in the Thematic Strategies for the Environment68.

Significant progress has been made on the integration of biodiversity needs into environmental policy. The Water Framework Directive provides for improvement of the ecological quality of freshwaters towards the achievement of ‘good ecological status’. Similarly, the recent Thematic Strategy on the Marine Environment69 and proposed Marine Strategy Directive70 introduce an ‘ecosystem approach’ to the management of Europe’s seas, towards achievement of ‘good environmental condition’, which should reinforce the conservation and recovery of marine biological diversity and marine ecosystem services.

A wide range of environmental policies address pollutant pressures. The recent Thematic Strategy on Air Quality71 provides for the reduction of air pollutants responsible for the damaging acidification and eutrophication of a substantial proportion of EU ecosystems. The Nitrates Directive72 provides for the reduction of these eutrophicating substances in rivers, lakes and seas. The forthcoming Thematic Strategy on the Sustainable Use of Pesticides, together with pesticides legislation, should reduce negative impacts of these products on biodiversity – notably the intended Thematic Strategy provision for definition of areas of zero or strongly reduced pesticide use. REACH73 should further reduce chemical pressures on biodiversity. Freshwater biodiversity should also benefit from the requirement to achieve good ecological status of freshwater under the Water Framework Directive74.

The Thematic Strategy on the Sustainable Use of Natural Resources aims to establish a long-term framework to reduce negative environmental impacts of resource use. It advocates in

65 COM (2004)431 final. Communication from the Commission to the Council and the Parliament on

Financing Natura 2000. 66 Presidency Conclusions, Brussels European Council, 19 December 2005. 67 COM(2001) 264 final 68 COM(2005) 466 final 69 COM(2005) 504 final 70 COM(2005) 505 final 71 COM(2005) 446 final 72 Directive 91/676/EEC of 12 December 1991 73 COM(2003) 0644 (03) 74 Directive 2000/60/EC

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particular integration of a life-cycle approach in to policies, to consider the environmental impacts of resource use at all stages of the life cycle and avoid trade-offs – which would include avoiding loss of biodiversity.

The forthcoming Thematic Strategy on Soils should reduce loss of soil and terrestrial biodiversity through protecting soil organic matter and soil structure and reducing soil sealing.

Provisions for access to environmental information and participation help ensure effective implementation of all these instruments.

2.6.1.3. Integration into Agricultural policy

Substantial progress has been made in the implementation of the Common Agricultural Policy (CAP) over recent years to better integrate biodiversity requirements. This has included: an increasing use of agri-environment measures (eg. to support extensive farming favourable to biodiversity) and compensatory allowances which may benefit biodiversity; the largely indirect benefits arising for biodiversity from the application of Good Farming Practice; the growth in organic farming; and the removal of headage payments in Less Favoured Areas (which caused overgrazing and biodiversity loss); training of farmers in environmental and biodiversity measures; and the development of agri-environment indicators.75 Food safety policy has resulted in the withdrawal from the market of dangerous active substances in plant protection products.

The 2003 CAP reform should help further mitigate the damaging trends of intensification and abandonment of high-nature value farmland, and further support the integration of biodiversity into forestry.76 The recently adopted Rural Development Strategic Guidelines77 are particularly supportive to biodiversity-related measures. Decoupling, modulation and cross-compliance should all provide indirect benefits to biodiversity, while agri-environment measures and payments for areas with handicaps provide opportunities of both direct and indirect benefits. It should be noted that agri-environment measures are (and will continue to be during the 2007-2013 programming period) the only obligatory measure under rural development. In addition, Member States must allocate at least 25% of the total rural development programme funding to Axis 2 measures (which includes agri-environment, support for areas with handicaps and Natura 2000 payments). However, the effectiveness of these measures in reversing the decline of farmland and forest biodiversity will very much depend on their implementation by the Member States.

The Thematic Strategy on the Sustainable Use of Pesticides should help reduce negative impacts of pesticides on biodiversity.

Progress in the integration of biodiversity into forestry has also been made through the Ministerial Conference on the Protection of Forests in Europe (MCPFE) process. This seeks to integrate biodiversity concerns into sustainable forest management. Further opportunity is provided by the forthcoming EU Forest Action Plan.

75 See Biodiversity Action Plan for Agriculture: Implementation Report, p. 39ff 76 See Malahide/Audit/2 – ‘Assessment of implementation, effectiveness and appropriateness of the

Biodiversity Action Plan for Agriculture.’ 77 COM(2005) 304 final

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2.6.1.4. Integration into Fisheries policy

Substantial progress has been made in the implementation of the Common Fisheries Policy (CFP) in recent years to better integrate biodiversity requirements. These include: the definition of precautionary limit reference points for fish mortality rates and stock biomass for most fish stocks; new technical measures to protect harvested fish stocks, concerning for example fishing gear, protection zones and minimum sizes; new technical measures to protect juvenile fish and non-target species such as sharks and cetaceans, and to protect habitats such as deep water coral reefs and Posidonia beds.

The recent reform of the CFP78 should serve to further slow and reverse biodiversity loss linked to fisheries. The new CFP provides inter alia for: reduced fishing pressure to promote the conservation and sustainable use of commercially important fish stocks; introduction of further technical measures for the conservation and sustainable use of commercial fish stocks – including long-term management plans; introduction of further technical measures to reduce impact on non-target species and habitats; reduction of the environmental impact of aquaculture; and the introduction of Regional Advisory Councils to improve dialogue between fisheries interests, scientists and environmentalists. There is also an increasing emphasis on sustainability in the Community Fisheries Partnership Agreements with third countries. The Commission’s proposals for a European Fisheries Fund79 provide enhanced opportunity for projects with environmental benefits. However, the recent Council decision on the Financial Perspectives may result in reduced availability of environmental funds under this instrument.

There remain serious shortfalls in implementation at Member State level. The latest report CFP Compliance Scoreboard continues to reveal substantial problems in compliance including poor reporting of catch quantities, fishing effort, fleet registry obligations and environmental issues, some overruns of fishing quotas, and increasing serious infringements, in particular relating to unauthorised fishing. Council decisions relating to total annual allowable catches continue to exceed the Total Allowable Catches (TACs) recommended by scientists and proposed by the Commission.

It is too early to say whether the recent reform will be effective in enabling the recovery of Europe’s severely depleted fish stocks and preventing damages to non-target species and habitats80.

2.6.1.5. Integration into other EU internal sectoral policy

The integration of biodiversity concerns into other sectors, notably, transport and energy, regional development and tourism, has been much weaker.

Some progress has been made in the integration of biodiversity needs into Cohesion and Structural Funds. A significant proportion of projects funded under these funds is environmental, and may yield indirect benefits to biodiversity, for example by reducing pollutant pressures, and some projects directly address biodiversity needs. However, there are also frequent allegations of damages to biodiversity arising from projects supported by

78 COM(2001) 135 final 79 COM(2004) 497 final 80 See Malahide/Audit/3 – ‘Assessment of implementation, effectiveness and appropriateness of the

Biodiversity Action Plan for Fisheries.’

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structural funds.81 The new Cohesion and Structural Funds Regulations for the Financial Perspectives 2007-2013 - notably that for the European Regional Development Fund - provide opportunities for support to biodiversity-related projects which may be taken up at Member State initiative.

Strategic and environmental impact assessments82 83 inform decision-making on the potential impacts of certain programmes, plans and projects on biodiversity. Environmental impact assessment has been the principle instrument to inform decision-making of potential negative impacts of developments in these sectors on the environment in general and on biodiversity in particular. However, as with the nature directives, the Commission received a large number of complaints relating to alleged infringements of the EIA directive. While not all complaints are upheld, the volume of complaints tends to suggest inadequacies in implementation. Strategic Environmental Assessment should help resolve many of these problems though there are early indications that there is a long way to go before this tool fulfils its potential in relation to preventing biodiversity impacts84. There is also need for a more proactive dialogue with these sectors.

The Environmental Liability Directive85 provides a disincentive to damage key nature sites and provides for compensatory measures.

2.6.1.6. Biodiversity governance in the EU

Arrangements for biodiversity governance at EU and Member State levels are gradually strengthening but further progress is needed, in particular at Member State level where the primary responsibility lies for implementation. A Biodiversity Expert Group established following adoption of the EC Biodiversity Strategy and Action Plans serves to advise the Commission on their implementation, monitor progress and strengthen coordination and complementarity. At Member State level, most Member States have developed national biodiversity strategies and action plans. The governance arrangements established for the development and implementation of these strategies and plans varies between Member States, with some more effective in building multi-sectoral, national-regional-local, and public-private sector partnerships than others. A brief review of complementarity between the EC Biodiversity Strategy and Action Plans and those of Member States has found substantial shortcomings. In developing their national Biodiversity Strategies and Action Plans, few Member States have expressly addressed the need for complementarity with the EC Biodiversity Strategy and Action Plans. Complementarity, where it exists, is largely incidental. Without strong complementarity between Member State level action and Community level action, we will not reach the 2010 targets. Many Member States are however now reviewing their national strategies and action plans in the light of these targets.

Progress is being made on the development of partnerships between stakeholders for the conservation and sustainable use of biodiversity. Examples include those between hunters and

81 See, for example, WWF (2006) Conflicting EU funds: Pitting Conservation Against Unsustainable

Development. WWF Global Species Programme, Vienna 82 Directive 2001/42/EC. OJ L 197, 21.07.2001, p.30 83 Amended Directive 97/11/EC, OJ L 073, 14.03.1997, p.5 84 EEB (2005) Biodiversity in Strategic Environmental Assessment – Quality of National Transposition

and Application of the Strategic Environmental Assessment (SEA) Directive. 85 Directive 2004/35/EC, OJ L 143, 30.04.2004, p.76

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bird conservation groups86, farming and wildlife groups87, forestry and biodiversity partnerships88, the Regional Advisory Councils being established for fisheries, and initiatives between the biodiversity community and the business89 and finance90 communities. However, these initiatives are largely recent and as yet of limited impact.

2.6.2. Progress with implementation – EU external dimension

2.6.2.1. Integration into Economic and Development Cooperation

Despite some direct funding to biodiversity projects, little progress has been made in the mainstreaming of biodiversity concerns in this policy area. This has been largely due to a change in the manner of aid delivery91. However, the Commission’s Communication on Policy Coherence for Development92 proposes both enhancing earmarked funds for biodiversity and strengthening mainstreaming of biodiversity in development assistance. The Commission’s Communication on a new EU Development Policy93 has elevated environment and natural resources from a cross-cutting issue to a key theme for EU development cooperation – both for the Community and for Member States. Biodiversity is highlighted as a key element of this theme. A new provision requiring systematically the development of Country Environmental Profiles sh